Sony has lowered its full-year profit outlook and warned of weaker sales of PlayStation games. The forecast comes as Sony announced it shipped 2.4 million PlayStation 5 consoles in the most recent quarter, just 4 percent more than the 2.3 million it shipped in the same period last year. The PS5 lifetime supply has now reached 21.7 million.
While hardware sales are up slightly year over year, software sales are down 26 percent. In an investor call, Sony attributed the gaming slump to a lack of big PlayStation titles this year compared to 2021 and less time to play games in general – helped by monthly active PlayStation Network users, which rose 3 percent to 102 million went back. Sony released its exclusive titles Gran Turismo 7 and Horizon Forbidden West earlier this year, but Elden Ring appeared on multiple platforms simultaneously and stole the spotlight.
Reuters reports that Sony has revised down its annual earnings forecast for its gaming business by 16 percent as it expects a further decline in game sales in the next quarter, along with costs related to its recent Bungie acquisition of 3, $7 billion.
Sony’s PlayStation game sales are the latest sign the games industry is slowing down after a big boost in the early stages of the pandemic. Microsoft doesn’t disclose its own shipments of Xbox hardware, but the company saw an 11 percent decline in Xbox hardware revenue last quarter, along with a 6 percent decline in Xbox content and services revenue and a decline in overall revenue from games by 7 percent. While Microsoft had a strong fiscal year for Xbox revenue, the company also warns that revenue from games and Xbox content and services will decline in the next quarter.
Sony previously forecast 18 million PlayStation 5 shipments for fiscal 2022, and the company has yet to revise those estimates. “The supply was not sufficient … the demand has not decreased. We really have to meet the demand, that’s the most important thing,” Sony CFO Hiroki Totoki said in an investor call today.
Sony is now hoping that hardware shipments will improve later this year, as it believes it’s mainly supply chain disruptions affecting PS5 shipments, rather than component shortages. However, Sony needs to significantly improve its PS5 shipments to meet its annual forecast of 18 million. For the remainder of the fiscal year, it must average more than 5 million PS5 shipments per quarter, a goal that’s more than double this quarter’s shipments.
New game releases should also help software sales, with the highly anticipated God of War Ragnarök due out on November 9th and The Last of Us Part I remake on September 2nd.
While overall PlayStation game sales have declined, 79 percent of PlayStation game sales last quarter were digital, up 11 percent year over year. PlayStation game sales have trended towards digital in recent years, boosted by the pandemic and a digital-only version of the PS5. Still, nearly 80 percent digital is a big shift if it lasts through the end of 2022.
Sony’s new PlayStation Plus Extra and Premium tiers launched in the US last month, but we won’t see their full impact until next quarter. PlayStation Plus subscribers currently stand at 47.3 million, up from 46.3 million at the same time last year, but down from 48 million in the third quarter of fiscal 2021. PlayStation Network Monthly Active Users reached 102 million last quarter, up from 105 million year-on-year.
